Big Vendors Oppose JB Hi Fi Takeover Of The Good Guys

Several vendors are believed to have approached the Australian Competition and Consumer Commission seeking reassurance that their submissions to an inquiry into the potential merger of JB Hi Fi and The Good Guys will remain confidential.

ChannelNews has been told that several vendors in the consumer electronics market are concerned that a consumer electronics monopoly could be formed following the demise of Dick Smith. Some of these CE Vendors also sell appliances.

This is despite the fact that several retailers including Aldi Big W, David Jones, Betta Electrical, Leading Edge, Officeworks, Myer, Kogan as well as more than 20 online resellers currently sell consumer electronics products in competition to JB Hi Fi and The Good Guys.

The ACCC told ChannelNews that closing date for submissions is Thursday 30 June 2016 and that a ruling or indication, will be made on August 4th.

According to one source a meeting took place between vendors who were attending a recent Harvey Norman function.

The primary discussion was JB Hi Fi and the potential that JB Hi Fi could demand better trading terms from vendors.

During the discussion concerns were raised as to whether any submissions made to an ACCC inquiry into the potential merger would remain confidential.

One attendee told ChannelNews that vendors are concerned that if the two companies merge pressure could be put on vendors over pricing especially vendors who currently only deal with Harvey Norman, The Good Guys and JB Hi Fi.

Currently The Good Guys have a small share of the overall consumer electronics market with the exception of TV’s, they do have a larger share of the large appliance market.

JB Hi Fi has only has around 3% of the appliance market.

Several of the vendors at the Harvey Norman event have admitted to ChannelNews that in the appliance market that JB Hi Fi does not currently get the same discounts or rebates as a Harvey Norman or The Good Guys due to the fact that the mass retailers only have only a small share of the appliance market and that the mass retailer is primarily in the small appliance market where Dick Smith were trying to compete before they were placed into liquidation with debts of over $400M.

One attendee at the Harvey Norman event said “The fear among some vendors is that they will be identified as having complained. Some of these vendors are looking at the cost of doing business in a market where several of these vendors only deal with Harvey Norman, The Good Guys and JB Hi Fi directly”.

They added “The rest of their business in particular with other smaller retailers is quite often via distributors”.

JB Hi Fi has not commented for this story.

ChannelNews understands that the mass retailer is still doing due diligence on a proposed takeover of The Good Guys.

A spokesperson for the ACCC said “Submissions do remain confidential”.

ChannelNews understands that a submission can be made for documents, under Freedom of Information laws, however the ACCC can still claim certain documentation as “commercially in confidence”.

David Richards has been writing about technology for more than 30 years. A former Fleet Street, Journalist He wrote the Award Winning Series on the Federated Ships Painters + Dockers Union for the Bulletin that led to a Royal Commission. He is also a Logie Winner. for Outstanding Contribution To TV Journalism with a story called The Werribee Affair. In 1997, he built the largest Australian technology media Company and prior to that the third largest PR Company that became the foundation Company for Ogilvy PR. Today he writes about technology and the impact on both business and consumers.